Microsoft likely to invest up Â£250 million in Facebook
Techcrunch reports tonight that Microsoft are looking to invest between Â£150-Â£250million in Facebook for a 5% stake. This values Facebook at around Â£5billion! The WSJ reckons Facebook are holding out for around Â£7.5 billion – certainly a damn sight more than Yahoo’s original Â£500million!
Anyway, what makes this move really exciting is that it enables Microsoft much better access to something/anything that NONE of their competitors have.
- Google blows MS away on Search and Online Ads.
- Yahoo has display ads nailed
- Microsoft has…Vista (to be fair, its Windows Live and office 2007 products rock!).
Microsoft is crying out for something in its portfolio that nobody else does and Facebook is that thing. Furthermore, I can’t help but think that becoming a bigger part of Facebook is a sign of greater things to come out of Microsoft – and it is all down to the one thing it doesn’t do very well at – advertising.
I can’t help but think that with access to so many social graphs at its disposal, Microsoft (with Facebook’s assistance) can’t learn enough to create a killer advertising platform that will be able to serve such contextual and massively relevant ads that it would blow anything on the market out of the water. And when it finds a way to create this killer contextual ad machine – it is able to serve them to the fastest growing social network out there.
Maybe I am simply finding some more love for MS after spending more time with my Dell laptop but I can’t help but feel that this is the start of a massively exciting road for Microsoft.
UPDATE: WSJ is on the same line of thought as me:
But an investment in Facebook could give Microsoft or Google greater opportunities to tie their services in with Facebook at a time when they’ve both recognized that social networking is changing how consumers tap into their core activities, such as Web search and email.
The Facebook approach is also part of Microsoft’s urgent attempt to strengthen its ad "platform," which lets advertisers automatically place ads on Web sites and on Microsoft’s Internet search engine.
Then again, this news might be just as exciting.